IRA Charitable Rollover

Making a Charitable Gift through an IRA Charitable Rollover

Congress has authorized a tax provision which allows those who are 70½ or older, to make a direct gift from your IRA to any qualifying charity federal tax free. This includes gifts to any Diocesan entities, including: the Diocese of Sioux City, your parish, a catholic school, institution or ministry, or any 501(c)3 charity without paying federal income tax on the distribution.

The IRA charitable rollover law may provide a good charitable giving vehicle if you are age 70 ½ and take the standard deduction rather than itemize deductions on your tax return. Consult with your financial or tax advisor about the possibility of transferring funds from your IRA. Here are some additional details and restrictions:

To qualify the donor must be over age 70 ½ and required to make an IRA distribution under IRA rules. The distribution qualifies toward your annual required minimum distribution (RMD).

The IRA distribution must be a direct charitable gift and not a distribution to a donor-advised fund, a charitable remainder trust or for a charitable gift annuity.

Distributions to charity cannot exceed $100,000 in a taxable year.

The distribution must be from your IRA, not a 401(k) or other retirement plan.

Contact your IRA custodian or representative before making a gift to arrange for the proper transfer of funds from your IRA directly to the Church and other qualified charities. The check issued from the IRA must be made payable to the charity.

If you have elected to have income tax withheld from your normal IRA distributions, advise your IRA administrator not to withhold taxes from distributions to charity.

Consult your tax advisor for the tax reporting of the special election described above.

For more information about how you and the Church can benefit from an IRA charitable rollover, contact the Office of Communications & Stewardship (712) 233-7524.

These helpful tips are only for your information on the IRA tax law and are not to be considered as legal, tax or financial advice. You should consult with your legal, tax and financial advisors to implement the benefits of the IRA charitable rollover law and related matters.